[Code of Federal Regulations]

[Title 34, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 34CFR685.212]



[Page 838-839]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 685_WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM--Table of Contents

 

                      Subpart B_Borrower Provisions

 

Sec. 685.212  Discharge of a loan obligation.



    (a) Death. (1) If a borrower (or the student on whose behalf a 

parent borrowed a Direct PLUS Loan) dies, the Secretary discharges the 

obligation of the borrower and any endorser to make any further payments 

on the loan based on an original or certified copy of the borrower's (or 

student's in the case of a Direct PLUS loan) death certificate.

    (2) If an original or certified copy of the death certificate is not 

available, the Secretary discharges the loan only based on other 

reliable documentation that establishes, to the Secretary's 

satisfaction, that the borrower (or student) has died. The Secretary 

discharges a loan based on documentation other than an original or 

certified copy of the death certificate only under exceptional 

circumstances and on a case-by-case basis.

    (3) In the case of a Direct PLUS Consolidation Loan that repaid a 

Direct PLUS Loan or a Federal PLUS Loan



[[Page 839]]



obtained on behalf of a student who dies, the Secretary discharges an 

amount equal to the portion of the outstanding balance of the 

consolidation loan, as of the date of the student's death, attributable 

to that Direct PLUS Loan or Federal PLUS Loan.

    (b) Total and permanent disability. If a borrower meets the 

requirements in Sec. 685.213(c), the Secretary discharges the 

obligation of the borrower and any endorser to make any further payments 

on the loan.

    (c) Bankruptcy. If a borrower's obligation to repay a loan is 

discharged in bankruptcy, the Secretary does not require the borrower to 

make any further payments on the loan.

    (d) Closed schools. If a borrower meets the requirements in Sec. 

685.214, the Secretary discharges the obligation of the borrower and any 

endorser to make any further payments on the loan. In the case of a 

Direct Consolidation Loan, the Secretary discharges the portion of the 

consolidation loan equal to the amount of the discharge applicable to 

any loan disbursed, in whole or in part, on or after January 1, 1986 

that was included in the consolidation loan.

    (e) False certification and unauthorized disbursement. If a borrower 

meets the requirements in Sec. 685.215, the Secretary discharges the 

obligation of the borrower and any endorser to make any further payments 

on the loan. In the case of a Direct Consolidation Loan, the Secretary 

discharges the portion of the consolidation loan equal to the amount of 

the discharge applicable to any loan disbursed, in whole or in part, on 

or after January 1, 1986 that was included in the consolidation loan.

    (f) Unpaid refunds. If a borrower meets the requirements in Sec. 

685.216, the Secretary discharges the obligation of the borrower and any 

endorser to make any further payments on the amount of the loan equal to 

the unpaid refund and any accrued interest and other charges associated 

with the unpaid refund. In the case of a Direct Consolidation Loan, the 

Secretary discharges the portion of the consolidation loan equal to the 

amount of the unpaid refund owed on any loan disbursed, in whole or in 

part, on or after January 1, 1986 that was included in the consolidation 

loan.

    (g) Payments received after eligibility for discharge. (1) For the 

discharge conditions in paragraphs (a), (c), (d), and (e) of this 

section. Upon receipt of acceptable documentation and approval of the 

discharge request, the Secretary returns to the sender, or, for a 

discharge based on death, the borrower's estate, any payments received 

after the date that the eligibility requirements for discharge were met.

    (2) For the discharge condition in paragraph (b) of this section. 

Upon making a final determination of eligibility for discharge based on 

total and permanent disability, the Secretary returns to the sender any 

payments received after the date the borrower became totally and 

permanently disabled, as certified under Sec. 685.213(b).

    (3) For the discharge condition in paragraph (f) of this section. 

Upon receipt of acceptable documentation and approval of the discharge 

request, the Secretary returns to the sender payments received in excess 

of the amount owed on the loan after applying the unpaid refund.

    (h) Teacher loan forgiveness program. If a new borrower meets the 

requirements in Sec. 685.217, the Secretary repays up to $5,000 of the 

borrower's Direct Subsidized Loans, Direct Unsubsidized Loans, and, in 

certain cases, Direct Consolidation Loans.



(Approved by the Office of Management and Budget under control number 

1845-0021)



(Authority: 20 U.S.C. 1087a et seq.)



[59 FR 61690, Dec. 1, 1994, as amended at 61 FR 29900, June 12, 1996; 62 

FR 30412, June 3, 1997; 62 FR 63435, Nov. 28, 1997; 63 FR 34816, June 

26, 1998; 64 FR 58969, Nov. 1, 1999; 65 FR 65629, 65694, Nov. 1, 2000; 

66 FR 34765, June 29, 2001; 67 FR 67081, Nov. 1, 2002]